What is PMI? – Metro Detroit real estate

 

So really what is PMI?  The way I explain PMI is that it is an insurance policy you have to pay for because you do not have 20% down.  It is a simple fact that home buyers with less money invested into a home are more likely to default or let the home go into foreclosure.  Whereas somebody that has invested 20% of the homes sale price isn’t as likely to let the home go.  They do not want to lose all that money.

PMI is an insurance policy provided to the bank/lender and is paid for by you.  If you default the PMI company pays the bank.  So PMI is a monthly insurance bill that is paid for by you the borrower.  I hope this explains what PMI is?  If you have any other real estate questions feel free to give me a call on my cell at (248)) 310-6239 or email me at yesmyrealtor@gmail.com   I know how confusing the home buying process can be sometimes.

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